Transportation cost

“ If the railroad switch is such that there is no hauling from factory to car except that on the floor of the factory itself, there would be no difference, otherwise there would be the expense of hauling to the loading tracks. If the expense of selling is not affected by motor hauling the only thing to be considered is the actual cost of transportation. ”

“ But even assuming the final cost to follow the range of transportation charges closely, is it not evident that, so small relatively are many freight charges by comparison with other costs of production, that consumption is not proportionately affected by their movement one way or the other? ”

“ With such highways only, our most valuable cereals will have no commercial value outside of a circle having a radii of 125 miles and 250 miles, respectively. Upon a railroad the cost of transportation equals one and one-fourth cents per ton per mile. ”

“ But of the bulky products like coal and grain, the greater part of the cost to the remote consumer is due to the cost of carriage.
It is also necessary to a proper appreciation of the problem, that we understand that railway transportation is now as absolutely necessary as is the production of food and clothing. Annihilate the railway communications of any of our great cities, and thousands would perish by starvation before they could scatter to agricultural regions. ”

“ By reducing the freights on the other present thoroughfares through the influence of wholesome competition, it would perhaps at once lessen the cost of inland transportation by nearly one hundred millions of dollars annually! ”

“ It is doubtful whether any other country has made a greater success of their system of transportation. You will pay 50 cents to journey some twenty odd miles out to Roslyn, on our Long Island railroad, but in Belgium a commuter journeys twenty miles in to the factory and back again every night and makes the six double daily journeys at an entire cost of 37-1/2 cents per week, less than the amount that you pay for the journey one way for a like distance in this country. ”

“ The unit for measuring the expense of transportation is the cost of moving a ton one mile; on a modern American railroad the average cost of a ton-mile is less than one cent. Even on the excellent roads of Europe the cost is ten cents or more; while it has been estimated that the average cost of moving farm produce to market over the common roads of the United States is twenty-five cents per ton-mile. ”

“ It is based upon the fact, which confronts one at every turn in a discussion of railway economics, that a large proportion of the expenses of a railway is independent of the amount of traffic. These fixed expenses must be met at all cost if the road is to remain solvent. They constitute a charge upon the entire traffic of the line, and are not susceptible of apportionment to each unit of transportation. ”

“ No matter what the errors of the past, no matter how we acclaimed construction and then condemned operations in the past, we have the transportation and the honest investment in the transportation which sped us on to what we are, and we face conditions which reflect its inadequacy to-day, its greater inadequacy to-morrow, and we contemplate transportation costs which much of the traffic can not and will not continue to pay. ”

“ Such a tax, if it exists, would go far to offset the profit which unduly low freight rates in general have produced. In short, the problem is to consider the possible net cost to the American people of our highly involved and most efficient transportation system. Our markets are so wide, and our distances so vast, that the problem is a peculiarly American one. ”

“ But they cannot take the place of the freight car or the steamship. They are more rapid, easily making 100 to 150 miles an hour, but they are as yet of limited capacity carrying light letter mails, and a few passengers, but at too great an expense to compete with the improved rail and water carriage of the present. Besides most people would rather be near the ground in case of accident. I mentioned to you the greatly reduced cost of railway transportation in North America where all the lines are operated by the state. ”

“ The freight service of a railway comprises the carriage of all kinds of goods simultaneously, from the most valuable high-priced commodities, such as silks and satins, down to lumber, coal, cement, and even sand. [141] To compel each of these classes of goods to bear its proportionate share of the cost of carriage, would at once preclude the possibility of transporting low-priced goods at all. One dollar a hundred pounds may not be too much to add to the price of boots and shoes for transportation from Boston to Chicago. ”

“ Any rate which will contribute a surplus, small or large, above the mere cost of transportation,—that is to say, above the expenses incident to this particular carriage,—and which thereby lessens by the amount of that excess the burden of the fixed charges remaining upon other traffic, is justifiable. ”

“ This rapid reduction of the prospective timber-supply is one of the serious phases of the question, and is causing grave apprehension as to the future sources of ties, not only to the railway officials, but to all persons who look to the general welfare of the country. Transportation now is so intimately connected with every business, and its cost so much a part of the price of nearly all articles, and especially of food-supplies, that the increasing cost of ties becomes a subject of national importance. ”

“ We can raise but a small proportion of the food necessary to feed the people of the State; under such circumstances the transportation must weigh heavily upon our industry. We feel it in the increased cost of living, which increases the cost of every article we produce. We feel it in the increased cost of the raw materials of our manufactures, which makes us less able to compete successfully with more favored locations. We feel it finally in the increased cost of marketing our goods. ”

“ Cost of transportation itself becomes an appreciable item in respect of every parcel. For this transportation the Post Office is in the main dependent on the railways, and in the determination of its cost the principles determining ordinary railway rates must necessarily apply. ”

“ The discussion of the nature of railroad expenditure may be concluded by a comparison of the net effects of the developments of the last few years; that is to say, of steadily expanding costs of operation and of slowly and tardily rising rates chargeable for service on the one hand, as over against the results obtained by mechanical improvements and increasing economy of operation coupled with growth of tonnage, on the other. The average cost of transportation has greatly increased. ”

“ In order to transport our tent and other articles, I hired two mules and a muleteer at twelve cents a pound as freight, for a distance of only seven miles, the usual charge of one cent a mile being in this instance increased on account of the extraordinary difficulties of the way. This is just two thousand times the cost of transportation in the New England States. ”

“ There can be no question that for an indispensable public service like transportation, conducted under monopolistic conditions, the ideal system of charges would be to ascertain the cost of each service rendered and to allow a reasonable margin of profit over and above this amount. ”

“ To lessen this distance is in the interest of the railroads and can be accomplished by decreasing the terminal charges and the cost of transportation per ton-mile. Express companies have for years accomplished this by employing the system of free collection and delivery, and railways in England do likewise. The motor transport companies will have to decrease their cost per ton-mile in order to increase the distance that it is profitable for the shipper to utilize motor trucks. ”

“ The principal purpose of the reference to the National Transportation Policy, as we have seen, was to prevent a carrier from setting a rate which would impair or destroy the inherent advantages of a competing carrier, for example, by setting a rate, below its own fully distributed costs, which would force a competitor with a cost advantage on particular transportation to establish an unprofitable rate in order to attract traffic. ”

“ The average cost per mile of railways in different countries is as follows:—
One of the great economic purposes of railways in new countries is to reduce the cost of rapid transportation in bulk far below that of slow transportation in small quantities. ”

“ We must pay the fair cost of this transportation, which is a small fraction of the selling price of commodities. We cannot burden our producers or restrict their markets by excessive costs of transportation.
As a soundly devised public policy reaches its fruition, railway security-owners may expect greater certainty of fair, but not excessive return; the public may reasonably expect lower rates; labour may reasonably anticipate security in properly compensated work. ”

“ The existing scheme of adjusting freight rates hits been favoring the basing points, until industries are attracted to some centers and repelled from others. A great volume of uneconomic and wasteful transportation has attended, and the cost increased accordingly. The grain-milling and meat-packing industries afford ample illustration, and the attending concentration is readily apparent. ”

“ Transportation is a factor in the cost of commodities scarcely second to that of their production, and weighs as heavily upon the consumer.
Our experience already has proven the great importance of having the competition between land carriage and water carriage fully developed, each acting as a protection to the public against the tendencies to monopoly which are inherent in the consolidation of wealth and power in the hands of vast corporations. ”

“ Cost of service is an important element in fixing transportation charges and entitled to fair consideration, but is not alone controlling nor so applied in practice by carriers, and the value of the service to the property carried is an essential factor to be recognized in connection with other considerations. ”

“ We are only concerned to state the simple truth. It may be that the railway companies in this country cannot afford to carry goods at cheaper rates. That is their look-out. They have undoubtedly incurred vast expense in providing the most ample and the most admirable facilities of transport, short of the all-important item of its cost. In no other country do we find such a splendid service. No other country has better roads nor more capable administration, nor quicker and more reliable dispatch, nor greater conveniences for traffic of all kinds. ”

“ Poor roads greatly increase the costs of bringing the farmers' crops and produce to market, costs that must be added to the price that consumers eventually pay. Inadequate railway transportation is another element that makes a considerable addition to the costs. Car shortages at crop-moving time, cars unsuited to the products to be hauled, excessive delays in forwarding, at terminals, on the way, and at transfer points, are common sources of expense. ”

“ In England where shipping distances are comparatively short the small van or car and quick deliveries have been evolved. In well-settled portions of this country, as in New England, similar practices might well be adopted that the railways may not be entirely eliminated and the [163] public forced eventually to resort to more expensive transportation methods when both direct and indirect costs are considered over the public highways.
The railroads are also complaining that the automobile is cutting into their passenger earnings. ”

“ What are the effects of this American practice of unduly disregarding distance as a factor in transportation? Not less [Pg 289] than five deserve separate consideration in some detail. It inordinately swells the volume of ton-mileage; it dilutes the ton-mile revenue; it produces rigidity of industrial conditions; it stimulates centralization both of population and of industry, and it is a tax upon American production.
One cannot fail to be impressed with the phenomenal growth of transportation in the United States, especially in recent years. ”

“ However, as we pay about $80,000,000 per annum to foreign vessels for the transportation to a market of our surplus products, thus increasing the balance of trade against us to this amount, the subject is one worthy of your serious consideration.
"Cheap transportation" is a subject that has attracted the attention of both producers and consumers for the past few years, and has contributed to, if it has not been the direct cause of, the recent panic and stringency. ”

“ If American labor is more expensive, it is also more efficient than labor is elsewhere.
It must also be considered that the average haul in Europe is much less than the average haul in the United States. It has always been maintained by the railroad companies, and very justly, too, that the terminal charges are as important a factor of freight rates as is the cost of carriage. ”

“ It is remarkable, however, that, notwithstanding the large increase of population in the West, the facilities afforded for travel, reduction in rates, and a general increase in railroad business, passenger traffic has decreased, indicating, as the auditor believes, either that the people could not afford to travel, or that the railroad companies have not yet solved the problem of passenger transportation. ”

“ Although not often so considered, the matter of passenger transportation is a much more important matter in our greatest cities than either lighting or water supply. The laboring man, who has to pay perhaps twelve cents for the necessary ride back and forth to his work every day, feels this tax most severely. Suppose that under such an arrangement for street railways as we have outlined for gas and electric lighting companies the fare would be reduced to three cents. ”